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Brazil Output Rising

Brazil’s industrial production rebounded in March, rising at its fastest pace in more than two years and fueling hopes that the country’s prolonged recession was nearing an end.

Industrial output grew 1.4% in March from February after seasonal adjustments, government statistical agency IBGE said on Tuesday. That was the biggest monthly rise since January 2014 and followed a 2.7% drop in February, Reuters reported.

It was, however, slightly below the median forecast of a 1.6% increase in a Reuters poll of economists.

Output was down 11.4% in March from the year-earlier period. That compared to a 9.8% decline in the 12 months through February.

Production increased in half of the 24 sectors covered by the IBGE survey. The food processing sector gained 4.6%, erasing the entire 2.1% loss it saw in the first two months of the year. Capital goods manufacturers also ramped up production, boosted by a recent currency drop that made Brazilian exports

more competitive in global markets. Production of machinery and equipment rose 8.5% in March, IBGE said.

Brazilian industry has shrunk to its 2008 level as the country struggles with what is likely its longest and deepest recession in more than a century. A private survey of purchasing by managers on Monday suggested March’s rebound could be short-lived though, with an index of activity falling to its lowest level in seven years.

A separate survey by the National Confederation of Industry of Brazil showed a growing concern among managers about tight credit conditions, as interest rates remain at near a 10-year high. Still, inventories fell for a fifth straight month in March, raising the possibility of an accelerated recovery when demand picks up.